The circulation of goods violating intellectual property rights (“IPRs”) has various negative ramifications which stretch from diminishing the right-holder’s potential of fully monetizing their rights, to health and safety concerns and reputational damage and dilution.
In Malta, the law which primarily caters for anti-counterfeiting matters in IPRs is the Intellectual Property Rights (Cross-Border Measures) Act (Cap 414 of the Laws of Malta) (“Act”). As an EU jurisdiction, relevant EU laws such as Customs Regulation 1383/2003 concerning customs actions against goods suspected of infringing certain IPR and measures thereto also apply in Malta.
The Act equips right-holders with the right to demand that action be taken against the cross-border movement of goods infringing IPRs. In this respect, it should be noted that the Act deems three (3) kinds of goods as goods infringing IPRs:
Goods Infringing IPRs
Whilst the meaning of goods infringing a patent might be self-evident, the distinction at law between counterfeit and pirated goods might merit elaboration.
“Counterfeit goods” essentially refers to goods which infringe trademark rights, whether as the trademark has been applied to the goods directly, or to the packaging, materials, brochures labels, stickers or even the instructions for use. As such, the mark could even be presented separately from the good itself, or there can be circumstances in which the presentation of the good leads to the good being deemed counterfeit. As such, therefore, this category refers to a situation in which a mark is applied in a way as to disguise the origin of the good and give the misleading impression that the good hails from the right-holder.
On the other hand, “pirated goods” covers goods which embody copyrights, neighbouring right or design rights, without the required consents – that is in common parlance “copies” of a genuine product. Typically, infringing goods amount to both counterfeit and pirated goods.
IPR infringing goods are barred entry into Malta and cannot be exported nor re-exported. Free circulation, temporary importation and even placing such counterfeit goods in a free zone or in a warehouse is illicit. There are instances however, where the general prohibition does not apply for example, these instances include that the goods are of a non-commercial nature and found within a traveller’s personal luggage.
The IPR holder can lodge an application in writing to the Comptroller of Customs for action to be taken against infringing gods. Such application consists of:
To prove that a person is an IPR holder, registration documents of the IPR are required, unless the right is unregistered, as may be the case in copyright, design or neighbouring right. In the latter cases, proof of authorship is accepted. Similar proof is required where the person alleging the infringement is a licensee or a representative of the IPR holder.
The applicant is also expected to indicate to customs the period of time over which the Comptroller of Customs is expected to take action. Moreover, costs are to be borne by the person lodging such an application.
The Act also permits the Department of Customs to act on its own initiative, that is ex officio, in circumstances where throughout its checks, Customs believe that any goods found are in violation of a third party’s IPR, whether counterfeit or pirated goods.
Thus, regulatory effort is made to synergise action to be taken by the authority and action to be taken by the IPR holder.
In cases where customs discover such goods on an ex office action, a suspension order may be issued delaying the release of the goods and subsequently, notify the holder of the IPR and granting them a five (5) working day period to lodge an application for action to be taken by the Comptroller of Customs.
Whether goods are intended for local consignment or are in transit, impacts the type of action that may be taken.
Where goods are for local consignment such goods may either be destroyed or released depending on the course of action taken by the applicant, if any, and usually applying a simplified procedure whereby action is to be taken by instituting legal proceedings within ten (10) working days from notification.
On the other hand, if goods are in transit, the same time periods apply, however there is the possibility of reaching an out-of-court settlement or of commencing judicial proceedings. Where recourse is made to the courts, the courts may eventually order the destruction of such goods or their disposal out of commercial channels, in principle ensuring that any person involved with circulating such goods do not reap any economic benefits to the prejudice of IPR holders although recuperation of damage or costs tends to be challenging.
This article forms part of GTG Advocates’ series “Basics of Maltese Intellectual Property Law”, authored by Dr Terence Cassar and Dr Bernice Saliba.
For more information on Intellectual Property Law and related areas please contact Dr Ian Gauci on firstname.lastname@example.org, Dr Terence Cassar on email@example.com, and Dr Bernice Saliba on firstname.lastname@example.org.
Disclaimer: This series is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.